Canada Housing Starts Climb 6.7% in February
By Paul Vieira
OTTAWA--Canadian housing starts in February rose at a faster-than-expected pace, based on strength in the greater Toronto market.
The result comes even though real-estate data in key markets suggest a sizable dropoff in sales, reflecting tougher mortgage-financing rules that took effect Jan. 1.
Housing starts for February came in at a seasonally adjusted annualized rate of 229,737, compared with 215,260 units in January, Canada Mortgage & Housing Corp. said Thursday. The February result was above market expectations of 216,500, according to economists at Royal Bank of Canada.
The trend measure, or a six-month moving average of the monthly seasonally adjusted annual rates of housing starts, was 225,276, or roughly unchanged from the previous month.
Some economists said the consensus-topping reading won't change their forecasts that residential building activity will cool this year.
The most recent data indicate Canadian residential real-estate sales plunged 14.5% in January to their lowest in three years as the impact of tougher mortgage-financing rules kicked in. Those rules are in attempt by officials to curb further growth in household debt, and mitigate the risk of a possible housing crash in markets such as Toronto and Vancouver.
BMO Capital Markets said housing-starts data tend to lag sales by about six months. Also, the Bank of Canada noted some housing demand appears to have been pulled forward in late 2017, before the introduction of mortgage-financing rules.
CMHC said that in February, urban starts rose 7.1% to 211,111 units. Multiple urban starts rose 15%, to 154,535 -- or nearly three-quarters of all housing starts. Single-detached urban starts decreased by 9.8% to 56,676 units.
Rural starts were estimated at a seasonally adjusted annual rate of 18,526 units.
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(END) Dow Jones Newswires
March 08, 2018 09:59 ET (14:59 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.